China’s new economic measure
According to Xinhua news, the State Council, which functions as China’s cabinet, discussed the economic situation at its meeting yesterday.
At the meeting chaired by Premier Li Chiang, it was stated that China’s economic recovery was affected by increasingly complex external conditions and the slowdown in global trade and investment, noting that more effective measures were needed in the face of the image change.
At the meeting, the need to improve macroeconomic policies, effectively expand demand, strengthen the real economy and prevent risks in key sectors was emphasized.
DISCUSSED REGULATORY PROJECT
An action plan for companies in the technology sector and a draft regulation on the management and supervision of private investment funds were also discussed at the meeting.
The news did not include details on what concrete measures to implement to encourage economic recovery.
The People’s Bank of China (PBoC), in raising the 1-year policy rate from 2.75 percent to 2.65 percent, signaled that it would opt for monetary expansion against the slowdown in the economy.
Following the messages from the State Council meeting, concrete growth measures are expected to be announced in the short term.
SIGNS OF SLOWDOWN IN THE ECONOMY
Data for May reveal that the Chinese economy is struggling to maintain its growth pace in the first quarter of this year, after the recession in the last quarter of last year.
According to data released by China’s National Bureau of Statistics (UIB), industrial production rose 3.5% year-on-year in May, below the 5.6% rise in April, while retail sales, which is considered the measure of consumption, increased. at 12.7 percent, behind the 18.4 percent increase in April.
Despite the low base caused by the lockdown and quarantine measures implemented by the Kovid-19 outbreak in the spring of last year, it was observed that production and consumption slowed down.
On the other hand, the main economic activity data announced by the UİB pointed to a decline in both the manufacturing and non-manufacturing sectors in May. The manufacturing purchasing managers’ index (PMI) decreased 0.4 points to 48.8, while the non-manufacturing PMI decreased 1.9 points to 54.5.
While exports fell 7.5 percent and imports 4.5 percent in May compared to the same period a year earlier, unemployment among the 6-24-year-old population rose to a record high with 20 ,8.
The Chinese economy grew 3 percent in 2022, registering the lowest annual output increase since 1976, after growth of 2.2 percent in 2020, when the first effects of the Covid-19 epidemic were felt. In the first quarter of this year, the economy grew 4.5 percent, exceeding expectations.
The Chinese government announced a growth target of “about 5 percent” for this year at the National People’s Congress in March. (AA)